Mining Pools Distribute $2.4M Transaction Fee After Flood of Phoney Refund Claims [Updated]

Mining pool Ethermine said it would never freeze transaction fees again.

AccessTimeIconJun 15, 2020 at 1:50 p.m. UTC
Updated May 9, 2023 at 3:09 a.m. UTC
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UPDATE (June 16. 08:50 UTC): This article has been updated with a note from Spark Pool, which has decided to distribute transaction fees to its miners.

Two mining pools have called time on waiting any longer for an ether whale to reach out after making two transactions with unusually high fees worth in the millions of dollars last week.

Bitfly, the company behind the Ethermine pool, announced Monday it had opted to distribute a total of 10,668 ETH (now worth just under $2.4 million) in transaction fee to miners that were active at the time the transaction went through last Thursday.

"As the sender of the transaction ... has not contacted us after 4 days we have made the final decision to distribute the tx fee to the miners of our pool," Bitfly tweeted. "Given the amount involved we believe 4 days is sufficient time for the sender to get in touch with us."

Chinese mining pool Spark Pool has also now said that it will distribute its $2.6 million transaction fee out to its members. "The legitimate sender of the transaction has not yet contacted us to provide a validating signature to prove their identity," the company said. "We have, therefore, decided to distribute the transaction fees to Ethereum miners working on that day."

On Wednesday, Spark Pool processed a transaction from a single address with a hefty ETH balance, who sent a minuscule 0.55 ETH (then worth $133) with a transaction fee worth $2.6 million at the time. Barely a day later, at approximately 04:00 UTC on Thursday morning, the same address sent 350 ETH with another fee, also worth $2.6 million.

When the network's running smoothly, the average fee for an ether transaction hovers around the $0.50 mark. Two transactions would, therefore, cost about $1. But in total this single wallet holder, who has not been identified, dished out over $5.2 million in fees for just these two transactions.

Spark Pool, which has been through this before, froze the transaction to give the sender time to reach out and work on a deal to reclaim some of the transaction fees. After it happened again, less than a day later, Ethermine followed suit and gave the sender a grace period to get in touch.

But that hasn't happened. Bitfly said it had instead received requests from, "multiple people [who] claimed being the sender of this transaction, [but] none of them was able to produce a valid signature of the sending account."

Perhaps flagging from the volume of phony requests, the company has ruled out freezing transaction fees like this ever again, regardless of how much the fee might be.

"In the future, we will no longer interfere in the payout of large tx fees," they tweeted. "Our advertised payout policy is to always distribute the full block reward and we will be sticking to that independent on the amount involved."

Spark Pool has said it will distribute the transaction fee out to the miners who were active on that day, based on a snapshot of miner hash rate that will be taken on Wednesday at 07:30 UTC – exactly seven days after processing the mysterious transaction.

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